Project Summary Genetically-modified mouse models have proven to be essential for the production of antibody-related biological drugs (biologics). To date, the majority of biologics originate from mouse models, and small animal models are used not only to generate the antibodies, but also as a platform for further optimization and testing of the biologics. Unmet Need: Camelid-based antibodies, which have superior antigen binding and physico- chemical properties (stability, hydrophilicity, etc.) have not realized their full potential, to the same extent that antibodies have. This is founded in the logistic and financial hurdles immunization of camelids pose for monoclonal heavy-chain antibody (HCAb) production and the fact that in vitro technologies cannot fully recapitulate the exceptional natural selection towards extremely diversified, high-affinity binders that occurs in animals. Product: In this SBIR project we propose to develop a genetic platform in a murine host for the discovery and development of partially humanized hybrid HCAbs (and their products) containing camelid VHH domains ? a combination not found in nature. Since their discovery in the early 1990s, HCAbs have generated progressive interest in the biotech, diagnostic and therapeutic fields due to their intrinsic properties and adaptability. Significance: Apart from a small size paired with robustness and superior access to difficult epitopes, HCAbs can be easily processed into, and utilized as, single domain binding units (VHH) while preserving their affinity towards antigens (in contrast to conventional antibodies). Innovation: The proposed targeted mouse model carrying a pre-engineered alpaca/human immunoglobulin locus will potentiate the production of high affinity HCAbs by serving as an alternative, hybrid Ab host. It will allow natural, in vivo affinity-maturation of antigen-specific HCAbs in a small animal platform, one amenable to further genetic manipulation. It will enable larger cohort sizes than the natural camelid hosts, and streamline HCAb generation, thus providing further potential for the development of HCAb and VHH domains for downstream applications. In our Aim 1, we focus on sequential genetic engineering of a targeted hybrid alpaca/human immunoglobulin locus in embryonic stem cells. In Aim 2, our focus is to characterize the generation of HCAbs originating from the immune system of the newly generated hybrid mouse model and to validate the applicability of our small animal platform. HCAbs derived from our novel mouse model will be subject to basic immunological analysis allowing us to characterize the repertoire and efficiency of the Ab response to model antigens (Phase I). If successful, we will utilize the newly generated animal model to produce HCAbs against disease-relevant, difficult antigens and progress to hybridoma development in further collaborations (Phase II). Beyond this, our platform, based on its design, will also allow further genetic modifications to take place involving antibody domains from other species and/or further changes to enhance HCAbs diversity, as well as optimization of individual VHH domains.